affordable rental apartments market analysis for tatum, nm

Transcription

AFFORDABLE RENTAL APARTMENTS MARKET ANALYSIS FOR JAL, NM
Market Analysis prepared at the request of the
Eastern Regional Housing Authority and
The City of Jal, New Mexico
June 15, 2010
Market Analysis prepared by Russell Doss, P.E.
Executive Director of Lea County Housing, Inc.
TABLE OF CONTENTS
1.
Table of Contents……………………………………………………..
2
2.
Description of Market Area……………………………………….…
3
3. Topography and Special Features……………………………………
3
4. Transportation………………………………………………………...
4
5. General Plan and Growth Patterns………………………………….. 5
6. Government Services………………………………………………….
6
7. General Services and Amenities……………………………………...
7
8. Maps…………………………………………………………………...
8-19
9. Economics of Market Area…………………………………………...
20
10. Employment and Unemployment……………………………………
21
11. Retail and Commercial Markets…………………………………….
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12. Demographics of the Market Area………………………………….
24
13. Conditions of the Market Area – Occupancy by Tenure………….
25
14. Rental Housing by Structure Type………………………………….
26
15. Vacancy and Absorption……………………………………………..
27
16. Mortgage Market Survey……………………………………………
29
17. Home Sales Survey…………………………………………………...
30
18. Rental Market Survey………………………………………………..
31
19. Housing Conditions Survey………………………………………….
32
20. Land Availability……………………………………………………..
33
21. Total Demand for Housing…………………………………………..
34
22. Housing Need Breakdown…………………………………………….
36
23. Need Summary………………………………………………………… 37
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Affordable Rental Apartments Market Analysis 1. DESCRIPTION OF MARKET AREA Jal is the third largest community in Lea County, New Mexico with 1,996 people (2000
census) representing 743 households in an incorporated area of 4.8 square miles. Jal is
the southernmost community in Lea County and lies immediately southwest of the
intersection of NM Highway 18 and NM Highway 128.
The four lane State Highway 18 is the main north/south route through Lea County and
connects Jal to the three largest Lea County Communities. Jal’s closest New Mexico
neighbor 23 miles to the north is the City of Eunice, NM (pop. 2,562). The largest City
in Lea County is Hobbs, NM with 28,657 people 43 miles north of Jal and the Lea
County seat is Lovington (pop. 8,471) a distance of 66 miles north of Jal.
Located approximately 70 miles west of Jal along NM Highway 128 is the City of
Carlsbad (pop. 37,463) famous for the Carlsbad Caverns National Park. NM State
Highway 128 is listed as the shortest route for Texas population centers southeast of Jal
to travel to Carlsbad.
Jal has very close proximity to the Texas-New Mexico Border and is located less than 10
miles away from the Texas State line to the east and to the south. Immediately south of
Jal along Highway 18 a distance of 20 miles is the City of Kermit, Texas (pop. 5,714).
Andrews, TX (pop. 9,652) is located 44 miles to the northeast. The largest population
center in the vicinity of Jal is the Odessa-Midland, TX Petroplex which is 65 miles to the
southeast and has a combined statistical population of 261,435.
TOPOGRAPHY AND SPECIAL FEATURES – Jal sits 3,076 feet above sea level on the
southeast edge of the Eastern New Mexico High Plains, also known as the Llano
Estacado. The majority of the Llano Estacado area is extremely flat with slopes
sometimes as low as 10 feet per mile (0.2%). However, Jal is located in an area where
the grasslands of the plains meet the sand hills at the edge of the Chihuahuan desert.
Consequently, Jal has a slightly more hilly topography and the elevation falls at almost
1% slope from the northwest edge of the community to the southeast corner.
There are roughly 267 sunny days per year in Jal with the July high near 97 degrees and
the January low near 28. The area surrounding Jal is covered by low grasses with a
variety of mesquite and low desert plants interspersed. The good quality grassland
encourages use for ranching purposes. This good grassland caused Jal to have its
beginnings in the mid 1880’s when ranchers moved a herd of cattle into Monument Draw
approximately 6 miles northeast of Jal of the present city.
These cattle were branded with the initials of the previous ranch owner (J.A.L.) and the
cattle soon came to be known as JAL cattle. In time, the name became synonymous with
the settlement itself.
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Jal receives an average of 12.5 inches of rain each year. In the far north portion of the
city, surface runoff proceeds from west to east generally following streets and grassy
drainage swales to the railroad east of the city and then proceeds southerly. In the
remaining portion of the community, surface runoff follows streets and unimproved
drainage courses in a northwest to southeast direction until the ground slope decreases in
the south central portion of the community and the water flows begin to spread out and
flow overland toward the Jal Park area on the south edge of town.
Although a large part of southeast Jal is covered by the FEMA flood zone, the area east
of Commerce Street where the potential apartment development is proposed to be located
is out of the flood zone. The central part of the community where the majority of
businesses and community facilities are located is also free of flood plain areas.
There are no surface rivers in the area but the centerpiece of the 10 acre Jal Lake State
Park on the south edge of town is a man-made lake that was constructed to spell out the
name of the city (JAL) and resembles the cattle brand that inspired the city’s name.
TRANSPORTATION - As noted earlier, although Jal is a small community, it is very
fortunate to be located adjacent to a four lane highway and a railroad that provides
regional access and connects to the national rail system.
Adjacent communities are only a 20 to 30 minute drive and travel from one end of Jal to
the other can easily be accomplished in 5 minutes. Southeast New Mexico communities
generally do not make significant use of alternative forms of transportation other than
private vehicles for daily activities. Sixty percent of the households in Jal own two or
more vehicles. The census data shows that 80.9% of people drive to work alone and that
only 2.1% of the people walk to work in Tatum. Almost as many people (1.9%) take
alternate transportation (bikes, scooters, horses, etc.) to work as those who walk.
The average commute time for workers is 19.6 minutes. This indicates that several
workers work in jobs or industries outside of town or in adjacent communities. The 2000
census also shows that 14.8% of the workers carpooled to reach their work locations.
Although the census data shows that no employed people use public transportation to go
to work, the Senior Center Director staff has indicated that they do provide transportation
for their senior clients to get around Jal and to make occasional trips to the surrounding
communities for shopping or field trips.
Most residents of southeast New Mexico use regional airports in Texas for air travel due
to significantly decreased air fares and better connections. Jal is located 70 minutes away
from the International Airport in Midland, Texas for excellent air service. The local Jal
Airport is also available for use by twin engine turbo props and some light jets.
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GENERAL PLAN AND GROWTH PATTERNS – When oil and gas were discovered in
1928, Jal became a thriving boom town. With the establishment of Texas Company (later
renamed Texaco), El Paso Natural Gas Company and the Continental Oil Company, Jal
proclaimed itself the “Gas Capitol” of the nation.
The Jal population peaked in 1960 at 3,051 residents, and 284 homes were constructed
during the decade from 1960 to 1970 to meet the population needs. But with the ebbs
and flows of the oil and gas industry, oil and gas companies moved in and out to seek
more efficient operations.
The Jal population gradually declined from 1960 to 2000 and housing unit construction
slowed through the 70’s and 80’s with only about ten units constructed each year. In the
decade of the 90’s only 31 housing units were constructed and from 2000 to 2007 a total
of 13 housing units were constructed. This rate of construction was not able to keep up
with the rate of deterioration of the 331 homes built prior to 1960. With the population
decline, very many homes became vacant and fell into disrepair. These conditions took a
heavy toll on the home prices and overall property values of the area. This problem is
discussed and addressed in the June, 2004 Jal Comprehensive Plan.
The 2004 Comprehensive Plan addresses key General Plan issues for Jal including
creating incentives for redeveloping or clearing dilapidated properties and buildings in
Jal; encouraging infill development on the good amount of vacant land available for
future growth; precluding development of vacant lands that fall within the Flood Plain;
and to upgrade the City Zoning Code while including a new redevelopment ordinance.
As noted earlier, the main business district and the major community facilities including
the schools, library, and senior center are located outside of the 100 year flood zone.
There is also significant vacant residential land to the northwest of the main business
district out of the flood zone, but many of the present landowners are hesitant to sell their
land while property values are low. They prefer to hold onto the land until property
values increase as a result of the new industries coming to the area.
As a result, more community leaders are beginning to look at potential development of
vacant land in the west and southeast portions of the community. There is an entire city
block of vacant land outside of the flood zone that is available immediately east of
Commerce Street in southeast Jal. However, in order to develop this land as a residential
rental property, it would need to be rezoned. From preliminary discussions, this does not
appear to be a problem. The Comprehensive Plan “Concept” Zoning map shows this area
to be changed to a “residential” designation. There are also large vacant tracts of land in
west Jal, but they do not presently include any street or utility infrastructure.
Although the community is doing everything they can to spur new residential home and
apartment development, almost all of the builders and developers in the area are occupied
with developing homes in Hobbs, as the County’s largest population center.
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The 2004 Comprehensive Plan was a very good document at the time of its development
and it laid out a solid five year infrastructure improvement and growth plan for the City.
Although local and regional economic difficulties resulted in decreased income for the
community and did not allow for many of the proposed directives included in the plan,
the overall community infrastructure remains in good condition. The five year planning
period has now reached its conclusion and the City is making efforts to have the
Comprehensive Plan updated as soon as possible.
With regard to more recent population and growth patterns, the Jal population in 1990
was 2,153 and the population in 2000 was 1,996. It is generally understood that the oil
bust in 1998 caused a large number of individuals employed by the oil and gas extraction
industries in Lea County to leave the area.
With the price of oil moving upward and a variety of “Energy” related industries
developing in Lea County, the 2009 population estimate has grown to 2,062, which is
nearing the population of 1990. Since the 2000 Census, Jal has experienced 3.3 %
population increase and a 5.2% increase in available jobs.
With the new business and economic opportunities described later in this document,
population projections from the University of New Mexico’s Bureau of Business and
Economic Research (BBER) indicate an annual growth rate as follows:
YEAR
2015
2020
2025
2030
POPULATION PROJECTION
2,437
2,552
2,658
2,766
This data is based on the BBER’s medium or most likely series based on migration trends
that are due the economic development projects referenced in this market study.
After eight decades of production, Oil and Gas are still the major industries in Jal,
although ranching remains a small but significant part of the area’s economy.
As will be described later in this report, several energy related industries are causing
significant employment growth in the area. Housing development is needed to serve the
employees needed for these energy businesses and also the projected potash
development. As discussed in the 2004 Comprehensive Plan, the community
infrastructure is adequate to serve proposed new development if located on areas within
the present city limits.
GOVERNMENT SERVICES – The town of Jal provides governmental services
including general administration, sanitary sewer, water, police protection, and senior
citizens services. The town of Jal also has a volunteer fire department and emergency
medical services department along with operating its own volunteer ambulance service.
Solid Waste pickup is provided under contract by Waste Management of SE NM.
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Jal has a post office that provides mail service for the community residents. The
infrastructure for Jal is sized to serve a significantly larger population than presently
exists there.
GENERAL SERVICES AND AMENITIES – Jal is a town with tremendous community
pride. The community has developed a broad variety of community facilities and
amenities to serve all of its residents.
The Jal Medical Clinic serves residents on a sliding scale payment program and includes
lab and x-ray facilities. Jal also has a Dental Care Clinic, a Chiropractor, a home health
agency, and a massage therapist in private practice. The Jal Clinic provides outpatient
services and transport to maternal, neonatal, pediatric, trauma and emergency services
within 20 miles.
The Jal Public School District encompasses 996 square miles and consists of two school
facilities – Jal Elementary School and Jal High School. During the 2008-09 academic
year, the Jal Public School system had a total enrollment of 375 students. Jal schools are
rated among the top schools in New Mexico and their athletic teams have won several
state championships in their classification.
One of the highlights of Jal facilities is the Woolworth Community Library. The library
is a legacy to the Woolworth family (early homesteaders in Jal) and serves as a
combination school and community library with approximately 10,000 square feet
containing more than 35,000 volumes. The Woolworth Room contains exhibits
documenting the history of Jal. The library also includes computer terminals with full
internet access available to all members of the community.
The Woolworth Community Library is reputed to be one of the finest in the state and also
includes a soundproof children’s area, classroom, film and lecture theatre, as well as a
kitchen and multi-purpose public meeting room. One portion of the library contains the
Kathy Whitworth Display which showcases trophies, photos, and other memorabilia of
the Jal native, LPGA golf champion, and Hall of Famer.
Adjacent to the Woolworth Library is the Senior Citizen’s Annex which is an attractive
modern facility that provides recreational and social activities for the area seniors. The
Senior Center also participates in the State Meal Program and has homebound delivery.
The Jal Community Center is located at the southern edge of the downtown area. It has
undergone some renovation and provides an excellent community meeting area. The
facility also recently received a new kitchen and was made ADA compliant.
A unique attraction in Jal is “The Trail Ahead” metal sculpture. Local artist, Brian
Norwood, created and built a unique metal art sculpture consisting of 17 metal silhouettes
of cowboys and cattle spanning 400 feet across a ridge north of Jal. The sculpture pays
tribute to the early ranchers of the area and the cattle branded with the JAL brand and
town namesake. This distinctive display attracts visitors from throughout the region.
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Another distinctive and much used feature of the Jal community is the 10 acre Jal Lake
State Park on the south edge of town. This recreation area includes a man-made lake that
was constructed to spell out the name of the city (JAL) and resembles the cattle brand
that inspired the city’s name. This lake provides fishing uses and also serves as a wildlife
sanctuary for a variety of birds, including red wing blackbirds, ducks, geese, and several
migratory birds including herons, pelicans, swans, and seagulls.
The Jal Lake State Park features short term RV parking, tennis courts, sand volley ball,
playground equipment, basketball court, and shaded pavilions with barbeque pits and
tables. This park is also the site of numerous community events and celebrations
including the Fourth of July Celebration and the Annual Jalarama Chili Cook-off – Car,
Truck, and Motorcycle Show.
Jal also has seven more city parks which offer numerous activities. Five of these parks
are neighborhood parks that are located efficiently to serve all of the neighborhoods in
the community. The little league park and the Jal Lake Park are large facilities that serve
the entire community. In addition, Jal High School has an open walking track, tennis
courts, and an indoor swimming pool. The Jal Country Club has a very nice nine hole
golf course with reasonable green fees to the public and a swimming pool open to club
members in the summer.
Jal has a very good selection of general services and amenities. However a small town
cannot provide all of the goods and services provided by much larger communities. As
noted earlier, Jal residents use their vehicles for transportation extensively and make trips
to adjacent communities whenever needed for additional goods or services.
MAPS – On the following pages, several maps of Tatum and the surrounding area are
included. The maps are listed in order as follows:
1. Map of the region showing Southeast New Mexico and West Texas with Jal
surrounded by Lubbock, Midland-Odessa, Roswell, Hobbs and Carlsbad.
2. Map of Southeast New Mexico showing the highway connections from Jal to the
various surrounding communities.
3. Community Street Map of Jal, NM
4. Jal Comprehensive Plan Future Zoning Map.
5. Aerial Photo of the northwest portion of Jal including a potential project site.
6. Aerial Photo of the southeast portion of Jal including a potential project site.
7. USGS Map of Jal, NM
8. FEMA Flood Zone Map of Jal, NM
9. Detail of the FEMA Flood Zone Map of a potential project site in NW Jal.
10. Detail of the FEMA Flood Zone Map of a potential project site in SE Jal.
11. Lea County Plat Map of the SE area including a potential project site.
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REGIONAL MAP OF JAL AND THE SURROUNDING AREA
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REGIONAL MAP OF THE JAL AREA SHOWING THE
HIGHWAY CONNECTIONS TO THE SURROUNDING COMMUNITIES
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CITY STREET MAP OF JAL, NEW MEXICO
11
FUTURE LAND USE MAP FROM THE
JAL 2005-2010 COMPREHENSIVE PLAN
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Possible Apt.
Site >>>>>>>
AERIAL PHOTO OF NORTHWEST SHOWING A POTENTIAL PROJECT SITE
FOR A RENTAL APARTMENT COMPLEX
LOCATED NORTHWEST OF NINTH AND WYOMING
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Potential Project Site >>>>
AERIAL PHOTO OF SOUTHEAST JAL SHOWING A POTENTIAL PROJECT SITE
FOR DUPLEX AND SINGLE FAMILY RENTAL UNITS
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USGS MAP OF JAL, NEW MEXICO
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DETAIL OF NORTHWEST SECTION OF THE
FEMA 100 YEAR FLOOD MAP OF JAL, NEW MEXICO
POSSIBLE RENTAL APARTMENT DEVELOPMENT
LOCATION NORTHWEST OF NINTH AND WYOMING STREETS
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DETAIL OF SOUTHEAST SECTION OF THE
POSSIBLE DUPLEX AND SINGLE FAMILY RENTAL
LOCATION EAST OF COMMERCE STREET
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LEA COUNTY PLAT MAP OF POTENTIAL SITE FOR
DUPLEX AND SINGLE FAMILY RENTAL HOMES BLOCK S5, LOTS 1-10, OF THE SOUTHERNAIRE REDEVELOPMENT
REDIVISION SUBDIVISION OF THE CITY OF JAL
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ECONOMICS OF MARKET AREA – Jal began as a ranching community over a century
ago and its identity grew to include being an oil and gas center when oil was discovered
nearby in 1928. Jal is located in the heart of the Permian Basin, a large area of oil rich
fields that provide the majority of revenue for the State of New Mexico on a yearly basis.
After the oil and gas discovery and “boom” of 1928, the Jal population peaked in 1960 at
over 3,000 residents. But with the ebbs and flows of the oil and gas industry, oil and gas
companies moved in and out to seek more efficient operations. The oil boom of 1982
was followed by an oil bust in the mid 1980’s when the spot price of oil in Lea County
hit $ 7/barrel.
In 1990, the population had decreased to 2,153 and the area was hit hard by another oil
bust in 1998 when national oil prices went to the all time inflation adjusted record low
just before the 2000 census count of 1,996.
At the present time, oil prices are around $ 80/barrel and accordingly, the population
trend is presently reversing and showing a new growth trend. The 2009 population
estimate for Jal is 2,062. Oil prices are projected to stay above $ 50 per barrel in the
foreseeable future which will provide a stable cash flow and jobs for the community to
help continue the recent growth trend.
Because the Permian Basin Oil fields have been producing for several decades and are
considered “mature”, Lea County Leaders have been seeking to diversify their Industrial
Base and become a center of “Energy” rather than just “Oil and Gas”. This vision has
been significantly advanced in recent years.
Because of additions and expansions in a variety of Energy related industries in the last
decade, this county-wide region has recently been designated as the “Lea County
EnergyPlex”. Existing projects, projects under construction, and proposed projects in
the Oil, Nuclear, Solar, and Wind Energy fields are creating “gravity” to draw other
Energy related companies to Lea County to share the resources available in this area.
The biggest project currently underway in Lea County is the construction of the $ 3
billion Nuclear Enrichment Facility (NEF) located north of Jal on acreage five miles east
of Eunice. The NEF project has hired 300 permanent employees to work in the Eunice
Plant while having the capacity to produce 50% of the nuclear fuel needed in the United
States after facility construction is complete by 2015. During the construction period,
500-700 construction jobs will be remain active to complete the project.
NEF also recently announced they are expanding their operations into the Jal community.
An abandoned school facility will be renovated for the new NEF operations. The facility
construction work will provide 60 jobs through 2015 and after the construction is
complete 30 permanent jobs will be created at an average salary of $ 75,000 per year.
In addition to NEF, International Isotopes recently completed the land acquisition process
in Lea County to construct a $ 93 million uranium deconversion facility.
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The International Isotopes facility will process the byproduct produced by the NEF
facility and convert it to materials used in the construction of medical equipment and
microprocessor manufacturing as well as the making of solar panels. This plant is
proposed to begin construction in late 2011 and upon completion will provide 130 to 150
full time jobs in the Lea County area.
Lea County is also now entering the field of commercial “solar” energy production.
SunEdison and Southwestern Public Service (SPS) recently announced plans to build five
photovoltaic solar power plants in Southeast New Mexico that will generate a total of 50
Megawatts as early as 2011.
Four 10 Megawatt plants will be located in Lea County and two of those plants will be
located within 10 miles of Jal. This combined 50 Megawatt project will be one of the
largest in North America and will allow Southwestern Public Service to meet the state
mandate requiring 15% of Utility Companies’ energy to be from renewable sources by
2015 and 20% from renewable sources by 2020.
Finally, the Waste Isolation Pilot Plant (WIPP) is located approximately 32 miles west of
Jal on NM State Highway 128. This low level nuclear waste disposal facility has been in
operation for over 10 years and presently employs 752 individuals in the Lea and Eddy
County areas. The facility is projected to continue operation through 2033.
The most significant recent industrial development news for the Jal area is in regard to a
“Non-Energy” related industry. Intercontinental Potash Company of Canada reported in
March, 2010 that they found an extremely high grade of Polyhalite ore in southeast New
Mexico. Negotiations with the BLM have been completed to acquire the 36,900 acre site
which is served by NM Highway 128 west of Jal. The nearest railhead to the site is 14
miles to the east in Jal, NM.
Reports available on the company website (www.icpotash.com) state that the polyhalite
can be used to make Sulfate of Potash (SOP) for approximately $ 200/tonne, while the
market sale price is roughly $500/tonne. The site is projected to produce 600,000
tonnes/year and generate approximately $ 300 million in sales with roughly $ 180 million
per year in gross profit. Labor costs are projected at $ 12 million per year, which could
be approximately 300 employees at $ 40,000/year. Following the Phase II testing, mine
construction is proposed to begin in late 2011 with operations to begin in 2013.
Employment/Unemployment – Of the 1,524 Jal residents over 16 years old in 2000, 735
were in the labor force and 688 were employed. This represents a 6.4 % unemployment
rate in 2000. The New Mexico unemployment rate in 2000 was 7.3%.
When analyzing unemployment rates, it should be reiterated that Lea County is the
number one oil producing county in the State of New Mexico. In 1998, just prior to the
2000 census, oil prices hit an average of $ 11.71 per barrel, which is the all time inflation
adjusted low oil price since 1946.
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This resulted in several thousands of oil field employees leaving Lea County just prior to
the 2000 census. In fact, Jal lost 7% of its population from the 1990 census (2,153) to the
2000 census (1,996). With this in mind, it is somewhat notable that the unemployment
rate in Jal of 6.4 % at that time was still actually lower than the overall 7.3 % New
Mexico unemployment rate.
Since the 2000 census, the price of oil had risen drastically to a high level of $ 147 per
barrel in summer, 2008 and then sunk to $ 31 per barrel in February, 2009. Oil prices
have since rebounded to an average price of $ 80 per barrel in the early summer, 2010.
The 2009 average unemployment rate for all of Lea County was 7.6%. Overall with the
improving economic conditions related to the oil industry and the Nuclear Enrichment
Facility (NEF) construction, the 2009 population estimate for Jal is 2,062. This
represents a 3.3% population increase since the 2000 census.
The most recent internet information from Sperling’s Best Places website shows the
unemployment rate in Jal is 4.20 percent and recent job growth is 5.2% in the last year.
Future job growth over the next ten years for Jal is predicted to be 46.1%.
Although oil field workers only represent a small fraction of the workforce in Jal as you
will see below, the dollars provided by the higher oil field salaries, oil field business use
of community services, and the associated taxes paid by the oil field companies to local
governments, it is easy to see why local communities in Lea County are heavily
dependent upon the oil economy. When the price of oil is higher, all of the service
industries in the community benefit. When additional revenues are available, local
construction and material hauling occupations also benefit.
When looking at the Census 2000 Jal employment statistics, one initial thing to note is
that there is no military workforce in Jal that might be subject to future reductions due to
federal mandates. In addition, Jal also has less than 2% manufacturing employers. And
although Jal is a small rural community, you will see below that there is less than 2 %
agricultural activity that is ordinarily associated with lower pay scales.
The largest employment category in Jal is management, professional, and related
occupations with one hundred seventy (170) workers. Within that category, 119
employees are in professional and related occupations and 51 employees are in
management, business, and financial related occupations.
The second largest employment category, with one hundred forty eight (148) workers, is
in Production, Transportation, and Material moving occupations. Of this number, 85 are
transportation or material moving workers and 63 are production workers.
The third largest category of Jal workers is in Sales and Office occupations, with one
hundred forty one (141) workers. In this category, the employees primarily work for a
myriad of small business in the community and in adjacent communities.
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The fourth largest employment category, with one hundred twenty nine (129) employees,
is the in Construction, Extraction, and Maintenance operations. Within this category, 45
workers are employed in Installation, Maintenance, and repair occupations. Construction
trades employ 36 workers and Extraction employs 28 workers, with 20 supervisors
divided between these two categories.
The fifth largest employment category is Service Occupations with eighty seven (87)
workers. This category includes food preparation and serving occupations, with 27
workers; protective service occupations, with 23 workers; and building and grounds
cleaning and maintenance operations, with 20 workers.
The largest individual employer is the Jal School System with 68 employees. The second
largest employer is the Oil Field Servicing Company, Merryman Construction, with
approximately 60 employees. The third largest employer is Fulfer Oil and Cattle with
approximately 45 employees.
Tatum is an older community with a median age of 38.6 years. Of the 1,524 residents
over 16 years old, 456 are over age 55 and not working. So 30% of the working age
population is not in the workforce, or possibly retired. This can be compared to the 688
residents presently employed that represent 45% of the working age population.
When reviewing the future oil and gas economy for this area along with the energy and
potash related industries that already have, or will be coming into this portion of Lea
County in the very near future, Jal has a bright employment future for newcomers to the
area or young people entering the workforce. Both of these demographics will need
additional housing in order to live in Jal.
Also, with the high percentage of older residents as noted above, this represents another
significant demographic category from which affordable housing projects can potentially
draw housing clients. Additionally, as can be seen in later census statistics, several
families with children presently in Jal have low income levels and are below the poverty
line. These families may also be good candidates for two or three bedroom family
housing at the proposed rental development.
Retail/Commercial Markets –As noted earlier, the bulk of businesses in the community
are oil and gas related, but the town has several businesses to provide direct services
needed by the residents. These businesses include utility companies, insurance
companies, realtors, cafes and restaurants, construction companies, sign companies,
HVAC companies, post office, flower shops, feed companies, banks and finance
companies, a local newspaper, a cutlery company, and numerous trucking and transport
companies.
Jal is also served by two convenience stores that provide gas, food products, and general
convenience products. One of the newest businesses to Jal is the 8,000 square foot Dollar
General Store that will provide a good selection of daily use items to Jal residents.
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One site for the proposed housing development is planned to be located slightly over onehalf mile from the Jal downtown area where the majority of retail businesses are located.
The project is almost exactly one-half mile from the largest employer in Jal, being the Jal
Public School System and is approximately ¼ mile from the second largest employer,
being Merryman construction.
Although the Jal convenience stores, medical clinic, and gas stations are just over a mile
away from the project site, they can still be reached in a 15-20 minute walk, if needed.
When a greater selection for shopping is needed, Jal residents are able to drive 20 to 45
minutes to Eunice or Hobbs to access many fine stores. As another alternative, the
Midland-Odessa Petroplex (over 250,000 pop.) is just over an hour drive away if Jal
residents desire to access even larger community shopping opportunities.
For a small town, Jal has a good mix of businesses to support the community and the
many regional workers who frequent Jal during the work week. The development of the
new Dollar Store is a significant positive occurrence for the community and is an early
sign of the improving economic health of the community.
DEMOGRAPHICS OF THE MARKET AREA – As noted earlier, the median age of Jal
residents is 38.6 years. Of these residents, 573 (29%) are under 18, 418 (21%) are 62 or
older, and the remaining 1,005 (50%) are between 18 and 61.
Overall, Jal has 340 people age 65 or older (17%). The Jal Senior Center representative
estimated that possibly 10% of seniors at their facility were low income and estimated
only 5% might be interested in new affordable rental housing if it were constructed.
Census figures show that 10.7% of the seniors age 65 and over are below poverty level.
The most recent 2008 data from the State of New Mexico regarding the Jal Public School
System showed that 84 students are below the poverty level (19%). This tracks closely
with the Census figures showing that 22% of the school age students in Jal are below the
federal poverty level.
Jal has 50 female led families with children (8.6%). These female led families had a
median income of $ 15,625. Of the 173 Individuals living alone (23.2%), 99 were
individuals over 65 and living alone (13.3%)
Of the population aged 25 years or older, 473 (36.5%) have not received a high school
diploma or GED. In this age bracket, 824 (63.5%) have a high school diploma or
equivalent, and 120 (9.3%) have a bachelor’s degree or higher.
Of the 743 households in Jal, 602 householders own their home (81%), and 141
householders rent (19%). 59.5% of the households only have one or two persons in the
home and 40.5% of the households have 3 or more persons in the home.
24
The average household size for home owners in Tatum is 2.71 and the average household
size for renters is 2.60. Although this shows the household size for renters to be smaller
than for homeowners, there are still 43 rental households in Jal with four or more
occupants (30.5%). This statistic is very interesting, because of the two or more bedroom
apartment housing units in Jal, only 10 are two bedroom and 3 are three bedroom.
The 1999 median household income in Jal was $ 30,848. This is approximately 32% less
than the median household income in Lea County, which is $ 45,500.
The low income limit for a one person household in Lea County is $ 25,500. The income
records for Jal show that 294 households (38.5%) had incomes of less than $ 25,000 per
year in 1999.
The specific 1999 poverty records for Jal show that 80 families and 361 individuals have
total incomes beneath the poverty line. Of the individuals under the poverty line, 37 of
these were over 65 years of age. Of the 80 families under the poverty line, 71 of these
families had children less than 18 years of age.
These figures show that 13.8% of families and 17.9% of the population were below the
poverty line, including 28% of those under age 18 and 10.7% of those persons age 65 or
over. This information indicates that many families and individuals would meet the
income qualifications for the proposed apartment units.
Of Jal residents, 31% are Hispanic and 69% are not Hispanic or Latino. Of this latter
figure, 67% of those individuals categorize themselves as white alone on the race data.
With regard to special demographic characteristics, 14.4% of the Jal residents are civilian
veterans. With regard to disability characteristics, 200 persons (19.7%) of the residents
between 21 and 64 years of age are disabled. For those persons 65 and older, 152
persons (43.9%) are disabled.
With regard to the category of Grandparents as caregivers, 81 homes have grandparents
living with children 18 years of age or younger. And in 58 of these homes, the
grandparent is responsible for the grandchildren.
CONDITIONS OF THE MARKET AREA –
Occupancy by Tenure – The 2000 census information shows that 33.6 % of the renters
moved into their housing units between 1999 and March, 2000. Between 1995 and
1998, 34.9 % of the renters moved into their units. This leaves 31.5 % of the remaining
renters who have lived in their units longer than five years.
It is also interesting to note Census figures show that 83 home owners have lived in their
homes 40 years or longer. The census figures also show a total of 77 individual home
owners over age 65 to be living alone. Of this number, 61 are female homeowners living
alone and 20 have incomes below the poverty level.
25
This information indicates there might be a market for female homeowners living alone
who might be interested in selling their homes and moving into new low maintenance
apartments if they were available.
Residential Housing by Structure Type – From the census 2000 data, 90 % of the homes
are single family detached units. The next highest category is mobile homes which
represent 7.4% of the homes. Eight homes are single family attached units and twelve
units are found in two to eight unit structures representing the other 2.6 % of units.
After a review of the in town multi-family housing, the only large multi-unit structures
we can find are the 18 unit Hilltop Inn and the 8 unit Woolworth Apartments.
One individual property owner also has three units of apartments and twenty-five rental
homes (of which thirteen are dilapidated and unable to be rented). Another individual
owner has two rental homes that we have been informed of. However, from census
figures it can be seen that there are a total of 141 renter occupied housing units, so there
are almost 100 individual homes presently rented in Jal.
There is also a 62 lot mobile home park in the community of which about 22 lots are
occupied with mobile homes and RV units. The lot rent is $300/mo. or $15/day. The
majority of residents in this facility are construction workers.
One of the key housing characteristics from the 2000 Census about Jal is the median age
of housing. The median year of construction of rental housing in Jal is 1964, so the
average age of rental housing at the present time is 46 years. The median year of owner
occupied housing is 1961, so the average age of owner occupied housing is 49 years.
Almost half of the housing stock in Jal is approaching 50 years old. Many of these
homes are deteriorating to the point of being unusable.
Because of the lack of good quality available housing and the influx of new industrial
activity in the region, the City of Jal is very interested in the development of new
affordable housing. In the most recent Jal Comprehensive Plan, the City of Jal confirmed
that a primary function of the City is ensuring that all residents have access to safe,
decent, and affordable housing. The very first key issue identified in the Comprehensive
Plan included: 1) the City needs a variety of housing types including single-family
homes, apartments, and senior housing.
The City of Jal has over 75% of the vacant land within the City limits available for
residential housing. The “B” Residential designation is for all types of residential
housing including apartments and mobile homes. There is an excellent area immediately
northwest of the downtown area that has this designation. This area has a significant
amount of vacant land that could be developed in the future.
In addition, the City of Jal zoning ordinance notes that residential development is the
highest and best use for land in the city limits, and consequently can be placed in any of
the zones provided the development is well planned.
26
One of the primary sites for a new apartment development is located in the southeast
portion of the community immediately across the street from an “A” residential area and
only a block away from the Jal Lake State Park. Although this site is located on the
extreme south edge of an industrial area, the City of Jal is very excited about the
possibility of this development coming to pass.
Another potential site for apartment development is on the west side of the community in
an “A” Residential zone adjacent to an old abandoned Junior High School Building.
Although this site is not presently zoned for apartments, the City of Jal is also looking
into rezoning this property in order to accommodate the development of apartments.
Since the need for housing is so well supported in the community, it is anticipated that
there would be widespread community support for these type of rezoning decisions.
Current and Planned Building Activity – I checked with the NM Construction Industries
Division to get information on Building permits issued in Jal for the last few years and
was unable to obtain any information from them.
During discussions with the Jal City Clerk, she estimated that there have been less than
five new homes constructed in Jal in the last 10 years. She remembered that more
activity has been seen in home renovation where individuals have purchased
approximately ten old vacant homes and renovated them to become rental units. Jal only
allows mobile homes in the Type “B” Residential Zoning area, so there have also been
less than five mobile homes purchased and moved into Jal in the last 10 years. Finally,
no apartment units have been constructed in the last 30 years.
This information correlates with the improved economic information contained in this
study. In the last decade, some homes are being constructed for people taking advantage
of the improved job situation in the area. But since there is a short supply of suitable
housing to purchase, rental units are becoming the housing of choice. However, since
rental units are in such short supply, people are moving in mobile homes or existing
dilapidated housing units are being renovated to become rental housing stock.
Vacancy and Absorption – The 2000 census showed 51 vacant homes for “sale only” and
33 homes for “rent only” in Jal at that time. After checking several area real estate listing
websites in early 2010, there were no homes or apartments advertised for rent and only
one home was listed for sale in Jal. The home listed was a three bedroom, two bath, 1900
SF, fenced, with a large workshop, extra garage, fireplace, patio, and it was constructed
in 1950. It was for sale by owner for a price of $ 59,900.
In addition to the Internet and Realty Companies, representatives of Churches in Jal were
also contacted to see if they were aware of housing needs in the area. A representative of
St. Cecelia’s Catholic Church in Jal stated, “There have been housing problems in Jal for
the last two or three months. There just aren’t any rentals available.” He also said, “I
definitely see the need for more rental housing in Jal.”
27
During discussions on the same housing topic with a representative of the Jal Church of
God, he said, “A lot of people are looking for rental housing. Some people have jobs and
are looking for rent housing, and some people are looking for rental housing first and
then plan to apply for jobs in the area next.” He also said, “The existing quality of rental
housing in Jal is in poor to fair condition and many people are not satisfied with that.”
He stated he is asked by someone about rental housing roughly 1-2 times per week.
Housing is in such short supply in Jal that people are even renting out the motel units for
extended periods of time. The Hilltop Inn is over 30 years old and has no pool or
handicap facilities. The Hilltop Inn has 18 units with a variety of one bedroom and two
bedroom units. The prices vary from $ 58.75/night to $ 118.75/night. They presently
have no vacancy although sometimes they have three units vacant. They do not advertise
and still receive approximately six rental inquiries per day.
The Woolworth Apartments complex is well over 30 years old and has eight apartments
with one, two, and three bedroom units. This Apartment Complex has no pool, laundry
facilities, or playground, but it does have some private patios and a basketball goal in the
parking lot. The rental rates are $ 350 for a one bedroom unit, $ 400 for a two bedroom
unit, and $ 600 for a three bedroom unit. They presently have no vacancy and report a
10% average vacancy. They do not advertise and report receiving 1-2 calls per week.
They noted they rent to a lot of construction workers on a Monday through Friday basis.
As noted earlier, there are a number of rental homes in Jal; however the majority of them
are continuously rented. As inquiries were made around the community regarding
potential rental homes, two individuals were repeatedly given as rental housing sources.
The first source was Mr. Pete Cooper. Mr. Cooper stated he formerly owned thirteen rent
houses in Jal but has sold most of them and now only owns two rental homes, both over
50 years old. Mr. Cooper charges $ 300/month for the two bedroom home and $400 per
month for the three bedroom home. The homes have fenced yards and are roughly 1,200
square feet in size. None of the units are handicap accessible.
Mr. Cooper noted he does not advertise, but receives an average of one call per day for
rentals. He said if a home becomes vacant, it is immediately rented by someone else. He
stated that these units have been rented by both families and individuals in the past and
people usually stay over a year at a time. One of the last renters lived in one of his units
for 10 years.
Mr. Larry Hammons is the second person given as a source for rental units. Mr.
Hammons owns twenty-five homes that are over 50 years old. Twelve of these homes
have fallen into disrepair and are not available for renting at the present time. Mr.
Hammons also has three 2 bedroom apartments that are over 40 years old and in need of
repairs. Those three apartments are also not available for rent at the present time.
28
The thirteen remaining habitable rent homes owned by Mr. Hammons are mostly two and
three bedroom units although he occasionally has a four bedroom unit available. The
homes are fenced and roughly 1,200 square feet in size. None of the units are handicap
accessible. The rent is $ 250/month for the two bedroom home and $ 500/month for the
three bedroom home.
Mr. Hammons noted that presently only one of the thirteen habitable rent homes is
vacant. He does not advertise but still receives 3-4 calls per day inquiring about rental
housing. Mr. Hammons stated his units are usually rented by families and renters usually
stay 1-2 years although one renter stayed 12 years.
It should be noted that the majority of rental facility owners described the condition of
their facilities as “fair” and only Mr. Cooper described his two units as “average”. With
the age of the rental units in Jal being 40 to 50 years old with limited maintenance or
renovations, it is easy to see how the rental units could be in substandard condition. The
condition of these units could be keeping the rental prices low and the occupancy from
being maximized.
As can be seen from the vacancy information included above, there is a high level of
demand for rental housing in Jal. Most of the rental facility owners are receiving several
calls per day regarding potential rentals. With the increasing industrial activity around
Jal, the demand for rental housing should even increase in the coming months.
If new market and affordable housing projects were constructed in approximate twenty
unit phases on a yearly basis, the community housing demand exists for the project units
to be fully occupied within approximately four months or less. Because of the extremely
limited vacancy in existing rental units in Jal, the newly constructed units would be some
of the only rental housing available for new families coming to Jal for the expanding
employment opportunities.
If a HUD 202 Senior Housing facility were constructed in Jal with approximately twenty
units, it is anticipated that this project could be fully occupied within six months. The
longer time period is related to the fact that while some low income seniors may make the
decision to enter the facility relatively quickly, other existing Jal residents may need more
“decision time” to see if the facility may really be right for them and also to make the
“tough” decision if they are moving away from family members or a long time residence.
Mortgage Market Survey – The New Mexico Mortgage Finance Authority has several
good programs for first time homebuyers in Jal through a number of Lea County Banks.
Some of the programs allow the down payment and closing costs to be financed as a
second mortgage at the same interest rate as the primary mortgage.
The out of pocket costs to the home owner could be only $1,000 to $ 1,500 in these cases.
However, the difficulty in Lea County is that the majority of low income families have
very poor credit scores and are unable to qualify for these programs.
29
If a very low income person happened to have good credit and they wanted to buy a
median priced home for $ 83,443 which periodically becomes available for purchase in
the last ten years, they could possibly take advantage of the NM Mortgage Finance
Authority’s low income loan programs that would allow them to finance 100% of the
loan amount.
The payments on the base mortgage at 5.625 % would be approximately $585 per month,
including all taxes and insurance. Some other programs allow the second mortgage to be
forgiven after several years.
With a family of four, the 2010 very low income family limit is $ 23,550, or $ 1,962 per
month. With a 33% housing ratio limit, the maximum house payment they could qualify
for would be $ 647 per month. The $ 585 per month payment could be handled within
their income range if a home in that price range became available.
As noted earlier, the potential reality of a very low income person purchasing a home is
extremely low since the vast majority of low income individuals and families have credit
problems that would preclude them from purchasing a home.
For this reason, area affordable housing developers have been focusing on providing
rentals for very low income individuals since that is the greatest need of very low income
individuals and families at this time. The 2010 50% AMI HUD HOME Rent for a three
bedroom apartment would be $ 612, so this would also be financially feasible for a four
member very low income family if those types of units were available. Although this
would be higher rent than other Jal rentals, the quality of the unit would be far superior.
Home Sales Survey – After contacting Rely Realty in Jal, they said they knew of no
homes presently listed with realtors on the market for sale in Jal. They then referred me
to Bobby Shaw Realty in Hobbs as the other realtor who does the most business in Jal.
After speaking with Mr. Shaw, he informed me that he also knew of no realty listings for
homes for sale in Jal.
After a subsequent review of several Jal real estate listing websites, only one home was
found to be listed for sale in Jal. The home listed was a three bedroom, two bath, 1900
SF, fenced, with a large workshop, extra garage, fireplace, patio, and it was constructed
in 1950. It was for sale by owner for a price of $ 59,900.
From the Lea County “Emaps Plus” Data Base, only eight homes over $ 30,000 in value
have been purchased in Jal in the last ten years. These eight homes were actually
purchased between 2004 and 2008, and only two of the homes were shown to be newly
constructed at the time of purchase.
If the highest ($634,149) and lowest ($43,875) cost home prices from this data base are
thrown out so the average data is not skewed, the average sale price of the six remaining
homes is $ 83,443, with an average sale price of $ 43.41 per square foot in 2006. The
average home size for these homes was 1,922 square feet and was constructed in 1973.
30
Five other small homes were purchased in Jal during the last ten years with sale prices of
less than $20,000. These homes had an average size of 1,140 SF and most of these
homes were constructed in the 1950’s. These homes were sold at an average of $ 15.09
per square foot. It may be possible that these homes were the ones that were purchased
inexpensively and then renovated to become rent houses.
Rental Market Survey – Housing is in such short supply in Jal that people are even
renting out the motel units for extended periods of time. There is one motel and one
apartment complex in Jal. Both are over 30 years old and both have no pool, laundry, or
playground facilities.
The Hilltop Inn is a motel that has 18 rooms of which six are two bedroom for
$69.49/night, seven are one bedroom for $ 58.78/night, three are one bedroom with a
kitchen for $69.49/night, and two are two bedroom with a kitchen for $ 118.78/night.
One of the one bedroom units with the kitchen is also handicap accessible. No deposit is
required except for the nightly rate.
The Hilltop Inn owner said they are presently full and sometimes only have three rooms
available. Most of the single rooms are occupied by construction workers on a Monday
through Friday basis. He noted the two bedroom units with the kitchen are very popular
with families during holiday seasons.
The Woolworth Apartments have eight rental units of which two are one bedroom/one
bath for $350/month, three are two bedroom/one bath for $ 400/month, and three are
three bedroom/two bath for $ 600/month. A one month deposit is required. None of the
units are handicap accessible.
Although the Woolworth Apartment complex has no pool, playground, or laundry
facilities, it does have some private patios and a basketball goal in the parking lot. They
noted they rent to a lot of construction workers on a Monday through Friday basis.
In addition to the motel and apartment complex, there are a number of rental homes in
Jal; however the majority of them are continuously rented. As noted earlier, two
individuals were repeatedly given as rental housing sources in response to rental inquires.
The first source was Mr. Pete Cooper. Mr. Cooper stated he formerly owned thirteen rent
houses in Jal but has sold most of them and now only owns two rental homes, both over
50 years old. Mr. Cooper charges $ 300/month for the two bedroom home and $ 400 per
month for the three bedroom home. The homes are in average condition, have fenced
yards, and are roughly 1,200 square feet. None of the units are handicap accessible.
The second source was Mr. Larry Hammons. Mr. Hammons owns twenty-five homes
that are over 50 years old. Twelve of these homes have fallen into disrepair and are not
available for renting at the present time. Mr. Hammons also has three 2 bedroom
apartments that are over 40 years old and in need of repairs. Those three apartments are
also not available for rent at the present time.
31
The thirteen remaining habitable rent homes are mostly two and three bedroom units
although he occasionally has a four bedroom unit available. The homes are in poor
condition, have fenced yards, and are roughly 1,200 square feet. None of the units are
handicap accessible. The rent is $ 250/month for the two bedroom homes and $ 500 per
month for the three bedroom homes.
The 2000 census listed the median rent in Tatum at $ 322. The census also showed that
22.4 % of the rental population rent units between $ 200 to $ 300 and 34.2 % rent units
from $ 300 to $ 500 respectively. Another 3.9 % of the renters rent units between $ 500
and $ 750 per month.
The latest 2010 HUD listing of monthly Fair Market Rents for Lea County showed an
efficiency apt. at $ 433, 1 bedroom at $ 471, 2 bedroom at $ 523, and 3 bedroom at $ 688.
If the project were to use USDA RHA funding, the rents would be capped at 30% of the
maximum gross income per month of the renter.
Housing Conditions Survey – The average owner occupied home in Jal is 49 years old.
According to the 2000 Census, 3.3 % of the homes do not have full plumbing facilities
and 6.3 % of the units do not have full kitchen facilities.
The average value of a Jal home is approximately $ 33,220. With a 49 year average
home age, the low average home value, and the lack of facilities, this certainly lends
credence to the idea that many of the homes in Jal are old and in very poor condition.
The 2000 census shows 199 homes are unoccupied in the midst of this housing demand.
It appears that the majority of those homes are very old and dilapidated. Eighty percent
of these homes were constructed prior to 1970 and 100 of those homes were constructed
prior to 1960 which makes them at least 50 years old. The census shows that 49 of these
units do not have complete kitchen facilities and 22 do not have complete plumbing
facilities. Fourteen of those vacant housing units are mobile homes.
From the previous purchase information included in this report, it appears that five or
more of these homes may have been purchased in the last five years for an average of
$17,000 and have been renovated for occupation by either homeowners or renters.
If there was a local contractor who could buy dilapidated homes, renovate them, and sell
them, that might provide a benefit to the community. However, with the low average sale
prices, a contractor may not be able to make a profit after making the required
improvements and then selling them at the average home cost.
As noted earlier, only one home was found to be listed for sale in Jal. This is a home
with three bedrooms, two baths, 1,900 square feet, fenced, with a large workshop, extra
garage, fireplace, and patio. It was constructed in 1950 and it was for sale by owner for a
price of $ 59,900. It has been listed for approximately three months.
32
LAND AVAILABILITY – In the earlier section of this study under the Maps category,
there are several maps listed that detail the type of land that might be available for rental
apartment units as proposed. In addition to the potential site previously identified in the
southeast portion of Jal, several sites of varying size are located in the north, northwest,
and west portions of the city near the downtown area that appear promising.
The maps included earlier that are applicable for this section are listed as follows:
1. Map of the region showing Southeast New Mexico and West Texas with Jal
surrounded by Lubbock, Midland-Odessa, Roswell, Hobbs and Carlsbad.
2. Map of Southeast New Mexico showing the highway connections from Jal to the
various surrounding communities.
3. Community Street Map of Jal, NM
4. Jal Comprehensive Plan Future Zoning Map.
5. Aerial Photo of the northwest portion of Jal including a potential project site.
6. Aerial Photo of the southeast portion of Jal including a potential project site.
7. USGS Map of Jal, NM
8. FEMA Flood Zone Map of Jal, NM
9. Detail of the FEMA Flood Zone Map of a potential project site in NW Jal.
10. Detail of the FEMA Flood Zone Map of a potential project site in SE Jal.
11. Lea County Plat Map of the SE area including a potential project site.
Good portions of the southeast, northern, and western sites are out of the 100 year flood
zone that runs through Jal. The northern and western sites are closer to the downtown
area and the southern site is closer to major recreational facilities. An Environmental
Assessment will help determine which site is best for each proposed development.
Jal has a zoning ordinance that places a high priority on residential development. In
southeast Jal there is an entire city block of vacant land outside of the flood zone that is
available immediately east of Commerce Street. However, in order to develop this land
as a residential rental property, it would need to be rezoned. From preliminary
discussions, this does not appear to be a problem. The Comprehensive Plan “Concept”
Zoning map shows this area to be changed to a “residential” designation.
There are also large vacant tracts of land in west Jal, but they do not presently include
any street or utility infrastructure. These facilities would have to be constructed to
connect with offsite infrastructure. The majority of the western community area is zoned
as “Zone A” Residential where residences are allowed, but no mobile homes or multifamily structures. Again, in order to develop this land as a residential rental property, it
may need to be rezoned. As noted earlier, this does not appear to be a problem.
The northern and northwestern areas of Jal mentioned previously are in existing
subdivisions with full infrastructure. The majority of the sites are designated as “Zone
B” Residential where mobile homes and multi-family developments are allowed. The Jal
Comprehensive Plan specifically identifies potential locations for a possible senior
housing development immediately northeast of the downtown area in this “Zone B”.
33
TOTAL DEMAND FOR HOUSING – Total demand for housing is primarily a function
of employment and population. The economic market area review in this document
projected a solid increase of industry and jobs to the Jal area. One internet source cited in
the employment section of this market study, projected the job increase for Jal in the next
ten years (by 2020) to be 46.1 %.
If the 2000 census figure for Jal employment of 688 was increased by 46.1 %, the
resulting job increase would be 317 jobs. Presently Jal has 2.9 people for every person
employed (1996/688). If the total number of jobs in Jal increased by 317 (and the jobs
per capita proportion remained the same), the population could conceivably increase by
an amount of 919 individuals (317 times 2.9). That calculation would result in a Jal
population of 2,915 by year 2020.
This figure should be recognized as a very optimistic projection. The Jal Comprehensive
plan similarly lists 2,922 as the high range population projection for 2020. However, two
other studies show 2020 population projections for Jal to be in the 2,550 range.
In August of 2005, Gruen Gruen and Associates (GGA) performed “An Assessment of
Lea County Housing Needs” for Lea County Housing, Inc. This assessment projected the
Housing needs for Lea County from 2005 to 2020. In this assessment, the midrange of
their 2020 Jal population projection was found to be 2,542.
In November, 2007, the University of New Mexico Bureau of Business and Economic
Research (BBER) produced a study called “Population, Housing, and Education in Lea
County” which projected a population of 2,552 for the Jal area in 2020.
The 2020 population projections from GGA and the BBER are incredibly close in that
2,550 range while not being as optimistic as the 2,915 population projection (which was
based on a projected 46 % employment increase).
Using the 2020 midrange population projection of 2,542, the GGA 2005 Housing
Assessment projected Jal to have 926 households by 2020, a 24.6 % increase from the
2000 Census. Starting with the 2000 Census population count for Jal of 1,996 with 743
households, you would need to add 183 households in 20 years to reach a total of 926
households.
Because of the high range of agreement on the Jal midrange population projections
between GGA and BBER noted above, this 183 new households figure by 2020 was
selected for use in the Housing Demand Calculations below.
When calculating the Demand for Housing using the process described below, several
factors are available directly from the 2000 census data, but a number of the factors must
be determined before they can by used in the calculation. These factors are listed on the
following page.
34
Total Housing Demand Calculation He – number of existing households – 743 (from census)
Vr – average Vacancy rate – 5 % (reflecting minimal conditions)
Hs – Existing Housing Supply – 963, which is 957 (from 2000 census) and 2 new single
family homes plus 4 modular or mobile homes added since 2000.
Ud – Uninhabitable Homes – 93 (projected from census information and house count)
(Note: satellite map housing count verified approx. 870 housing units total)
C – construction in process – 10, (1 home constructed or remodeled per year for 10 years)
Cp – proposed new construction – 0 (No rental units or new homes proposed)
Hp – projected number of new households – 183 (from population projections)
Need = (He+Hp+Vr) – ((Hs – Ud) + (C + Cp))
Need = (743+183+5%) – ((963-93) + (10+0))
N = (972) – (870+10) = 92
So, Total Basic Need = 92 units between 2010 and 2020
The above calculation is based on a different formula than the process used in the 2005
GGA Housing Assessment for Lea County. However, the GGA projection for the
number of new households to be added in Jal between 2010 and 2020 was 105, which
was slightly more than the Total Basic Need figure calculated above.
It should be noted that the GGA Study also projected a need for 40 additional homes
between 2005 and 2010, of which only approximately 6 were constructed during that
period. GGA projected 145 housing units would be needed between 2005 and 2020.
It should be noted that the GGA study was based on job growth projections from BBER
data and have subsequently been found to be extremely conservative. For example, their
Lea County job growth projection for 2010 (23,024) was exceeded in 2005 and their Lea
County job growth projection for 2020 (26,730) was exceeded in November, 2007.
Even considering the downturn in oil prices from 2008 to 2009, the average employment
in Lea County for 2009 was 26,756. This is still in excess of the 2020 projection of
26,730 from the GGA Housing Assessment. These figures show that the employment
levels from the new Lea County industries are increasing quickly and are significantly
adding to the overall economic health of the County.
For the purposes of this study, we did not perform a detailed analysis of what single
family home construction might be needed as a result of the coming job and population
growth. The Total Housing Need estimate factors in that approximately one new home
will be constructed or one home will be remodeled each year in the next ten years. It is
hoped that existing builders will continue that rate of construction, or possibly increase it.
35
The Total Housing Need from this Assessment primarily focuses on the construction of
rental housing since the majority of new arrivals to Jal will desire to rent housing before
deciding to establish a permanent presence in the community.
Housing Need Breakdown – To further calculate the need for one bedroom, two
bedroom, or three bedroom units, the total amount of individuals or seniors were
determined who were: living alone, living as couples without children or senior relatives,
and living with children or senior relatives using the 2000 census data.
When reviewing the Census figures for the senior population over age 65, the need for
One Bedroom or Single Room Occupancy (SRO) Senior Apartments became apparent.
Ninety-nine seniors live alone in Jal and 37% are presently below the federal poverty
level. Another 104 seniors live in households where they are not listed as the primary
householder. This may mean their adult children are helping care for them.
The Census figures also show that the senior population over 65 years old in Jal could
increase by 66% in the next ten years. During recent public meetings to determine
housing need conducted by Lea County Housing, Inc. in Jal, senior housing was
requested.
If a twenty (20) unit senior housing facility could be constructed, it would only need to
have an approximate 10% capture rate for the 203 existing seniors living alone or living
with adult children. A senior facility of this type should be able to be fully occupied
within six months.
The main attraction for these units would be for seniors below the poverty level if they
could receive assistance. Seniors living with adult children may like the idea of a
separate safe place to live that could provide food and other amenities. And some seniors
who presently live alone in owner occupied housing may be very interested in moving
into new housing to avoid the burden of home maintenance and repairs.
A side benefit to the construction of a senior housing facility would be that some seniors
who presently live in one bedroom rental units would move out and these units would
then be available for other individuals or couples who would like to have one bedroom
rental housing.
When reviewing the housing needs for other Jal residents, because of the job growth
projections and associated salary levels listed in this assessment, a significant amount of
the proposed housing units will need to be market rate rental housing.
With this in mind, it should be pointed out that since Jal households still have a lower
median income than the remainder of Lea County, most renting households would still be
eligible for housing units with income limits up to 115% of Area Median Income (AMI)
if that type of housing development program were available.
36
Conversely, it should also be noted that a significant amount of the rental units to be
constructed should also be set aside for 50% and 60% income households. Census
figures show that 13.8% of families in Jal are below the federal poverty level, which
equates to one hundred two (102) families. Of these low income families, thirty-four of
the 152 renting households in Jal were paying more than 30% of their income as rent in
1999. These families would need eligible affordable housing with the potential use of
Section 8 vouchers to reduce their housing share of income.
If 13.8% of the 183 new households that are projected to come to Jal in the next decade
were also below the federal poverty level, that would equate to twenty-five additional
families needing affordable rental housing.
If twenty-four units of affordable rental units, possibly 50% or 60% Area Median Income
limited, could be constructed, an approximate 20% capture rate would be needed of the
total 127 families in need that were identified above.
If seventy-two units of rental housing could be constructed in the next several years, one
third of the units (24) could be set aside for 50-60% AMI families. The remainder of the
48 rental units could be constructed as market rate housing.
Census figures show that approximately 73% of Jal households live in three bedroom
units or larger. For families with children, three bedroom units provide the most
flexibility and convenience. It is anticipated that of the 183 households projected to
come to Jal by 2020, roughly three-quarters could be families looking for three bedroom
units.
As discussed earlier, of the seventy-two total rental units proposed to be constructed, 48
are recommended to be market rental units and 24 are recommended to be 50-60% AMI
affordable rental units.
It is recommended for the 48 market rental units, that 36 units be constructed as three
bedroom and 12 units be constructed with two bedrooms.
In the same manner, of the 24 units constructed for 50-60 % AMI families, it is
recommended that 18 units have three bedrooms and 6 units have two bedrooms.
Need Summary One would think that with all the population decreases of the last 50 years, that housing
would not be an issue in Jal. The census reflects that of the 957 housing units in the
community in the year 2000, 214 are not occupied full time or part time.
However, when you look at the census figures for age of the housing structures, it shows
that 331 of the 957 units were constructed in 1959 or earlier. This shows that 35% of the
housing units in Jal are 50 years old or older. In fact, a large percentage of the vacant
housing units in Jal are dilapidated and presently unable to be occupied.
37
A satellite housing unit count was performed and found approximately 870 total housing
units still in existence in 2010. Using this number, it appears that 87 housing units have
been demolished or removed since 2000.
Although this count shows that there are still approximately 127 vacant housing units in
Jal, the majority of these are most likely over 50 years old and dilapidated. A windshield
survey of the community also confirms this. With the many reports heard from Jal that
there are no decent housing units to rent, this makes sense.
The market analysis projects a 27% population increase in Jal from 1,996 in 2000 to
2,542 in 2020 as a result of the approximate 46% job growth projected in the next ten
years. Approximately 183 new households are projected to come to Jal for the new
employment opportunities.
This housing assessment projects that a total of 92 rental housing units will be needed for
the incoming households. Twenty units are proposed to be constructed as senior rental
housing, forty-eight units are proposed to be constructed as market rate rental housing,
and 24 units are proposed to be constructed as 50-60% AMI affordable rental units.
Because of the high number of families proposed to be coming to Jal for employment, it
is recommended that for the 48 market rental units, 36 units be constructed as three
bedroom and 12 units be constructed with two bedrooms. In the same manner, of the 24
units constructed for 50-60 % AMI families, it is recommended that 18 units have three
bedrooms and 6 units have two bedrooms.
From the initial analysis, it appears that the immediate construction of a 20 to 24 unit
project, consisting of 75% three bedroom units and 25% two bedroom units, would
provide a good mix to meet the needs of the families coming to Jal. This type of project
should be able to reach full occupancy within four months of construction.
It is recommended that the initial rental unit construction be followed up with two
additional 20 to 24 unit rental apartment facilities as soon as the first unit is completed
and fully occupied. Each unit should be able to reach full occupancy within four months
of construction.
After new families move to Jal and become comfortable with the community, it is hoped
that many would then pursue home purchase opportunities. If the home remodeling and
new home construction activities continue and possibly increase, several of these families
could be expected to become homeowners in Jal.
Finally, the construction of a 20 unit senior housing facility should be pursued as soon as
practically possible. There is a great need for this facility and after construction is
complete, it should be able to be fully occupied within six months. HUD 202 senior
housing funds could potentially be accessed as a funding source, but local coordination of
senior services for the project would be an important key.
38

affordable rental apartments market analysis for tatum, nm

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